- OKX has 100% ‘clean reserves’ according to a new metric developed by CryptoQuant.
- The “Clean Reserves” metric measures the percentage of reserves not held in the exchange's potentially vulnerable native token.
- Binance, one of the world’s largest cryptocurrency exchanges, has 88.95% clean reserves.
- OKX’s native token has failed to recover from its recent decline, despite the clean bill of health.
The reliance of FTX and Alameda too heavily on their own native token FTT ultimately catalyzed their demise, after it fell from $22 to $2. Now investors, battle-weary, from exchange crypto scandals are keen to know the extent to which custodians of their funds are vulnerable from holding reserves in volatile native coins.
Crypto data aggregator CryptoQuant has come up with a solution, a new metric called “Clean Reserves”, which measures the percentage of an exchange’s reserves that are not held in its own native token. The closer to 100%, meaning “none”, the better.
OKX is one crypto exchange that scores 100%, meaning none of its reserves are held in its native token OKB. Instead, most of its reserves are held in Bitcoin, Ethereum and USDT, of which it is “overcollateralized in” according to its proof-of-reserves report. This compares positively to the largest exchange in the world Binance, which only scores 88.95% on CrypotQuant’s Clean Reserves metric.
Also read: Bitcoin recovery fuels NFT growth, digital collectibles garner big interest as BTC crosses $21,550
OKX exchange is overcollateralized, beats competitor Binance in clean reserves
OKX exchange is considered overcollateralized in the excess reserves against user holdings in Bitcoin, Ethereum and stablecoin USDT. The BTC, ETH and USDT reserve ratio is actually at 105%, 105% and 101% respectively.
The exchange published their exact asset mix in response to CryptoQuant’s new metric that measures “cleanliness” of reserves.
OKX reserve ratios
Rival exchanges Bitfinex and Huobi, meanwhile, score 70% and 60% respectively for Clean Reserves.
OKX tops the list at 100%. The exchange therefore features a total separation between coin and exchange. Despite launching its native token OKB, the Seychelles-headquartered exchange, has adequate reserves in Bitcoin, Ethereum and the stablecoin Tether, unlike its competitors that hold part of user funds or reserves in their own native tokens.
Native tokens of exchanges have faced severe criticism since the collapse of FTX exchange after its token FTT dropped from $22 to $2 in less than five days causing the platform to suffer a liquidity crisis.
Despite the bill of clean health for its parent exchange, OKB is struggling to recover from the recent decline in its price. OKB price nosedived 5.5% in the 24-hour period between January 18 and 19 and the native token of OKX is struggling to recover from the drop.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ethereum whales turn bullish with Shanghai upgrade less than a month away
Ethereum (ETH) whales holding between 1,000 and 10,000 ETH have been scooping up the altcoin consistently for a week. With the countdown to the Shanghai upgrade and the ETH token unlock event, there is a spike in Ethereum demand among retail investors.
Ripple price to close the week with a bang as next week will be crucial for another 20% profit
Ripple price is closing this week with very profitable numbers, even if a fade is ongoing. The fade occurred after bulls received a firm rejection at $0.50 and have been trading lower from that level since. If bulls can keep their hands on this momentum and the Relative Strength Index (RSI) is not overbought, at least some 20% profit is being prepared for next week.
Will Cardano price advance as analysts call it one of the favorite altcoins next to EOS and COLT to pop?
Cardano (ADA) price is making the cut and has been shortlisted by several analysts that have put ADA in their top altcoin, primed to explode to the upside soon. ADA is flirting with a second week of gains and could recover its attempt to hit $0.415 as a crucial level for any further uptrend or downtrend.
Is the new partnering-up strategy the right way for Vechain price to avoid a 30% correction?
Vechain (VET) price had a busy week as several new partnerships were announced. Next to integrating with Dappradar to promote cross-chain visibility, the partnership with Boston Consulting Group might be the one that draws the most attention. Vechain price though is not taking this news in a good way and rather is at risk of tanking further.
Bitcoin: Should you trust this BTC sell signal or wait for $34,000?
Bitcoin price shows a clear picture of its rally after it breached a long-term bullish pattern in mid-January. As the rally takes a breather, sell signs have started to emerge, which is putting investors in a confused state.